Estate Tax in 2013

As I have previously blogged about, there is much uncertainty surrounding the status of the estate tax in 2013. If Congress does not act, the estate tax rate will go up and the exclusion level will go down.

Estate Planners note that it costs more money to try to plan for the unpredictable future of the estate tax. Planners are hoping that any reform brings some long-term stability to the system. At this point, they’re guessing on the best strategies for their clients, and many clients just wait to take any action at all.

The ABA Tax Section would like to see the estate, generation-skipping, and gift tax become permanent as they were in 2009. The top tax rate would be 45%, the exclusion amount would be $3.5 million for estate and GST taxes, and $1 million for gift taxes. Portability would also be made permanent.

It is likely that the current provisions will be extended for one or two more years. After that, more dramatic change is possible, especially since there is a growing consensus that the estate tax is unwise.

See Roger Russell, Uncertainty Around Death and Taxes, Accounting Today, June 1, 2012.

Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringing this article to my attention.